Changing Tax Audits to Ease Corporate Burden: "On-Site Audits Only When Necessary and as Brief as Possible"

National Tax Service Announces "Tax Audit Innovation Plan" at Meeting with Korea Federation of Small and Medium Business
Kwanghyun Lim: "We Will Fundamentally Reform the Paradigm of Prolonged On-Site Tax Audits"

Commissioner of the National Tax Service, Kwanghyun Lim, announced on September 30 that, "Going forward, the National Tax Service will align with the pro-business stance of the government, which believes that 'corporate growth is economic growth.' Accordingly, on-site tax audits will be kept as brief as possible and conducted only when absolutely necessary."

On this day, Commissioner Lim held an on-site communication meeting with the Korea Federation of Small and Medium Business and stated, "Most corporate finance managers feel significant pressure and tension from the very method of tax audits that require tax officials to be stationed on-site."

Kwanghyun Lim, Commissioner of the National Tax Service, is delivering a greeting at an on-site communication meeting with the Korea Federation of Small and Medium Business on the 30th. (Photo by National Tax Service)

Commissioner Lim emphasized, "In the past, tax officials would stay at companies for weeks or even months to conduct audits, and during this process, companies often had to set aside their core work to respond to interviews and requests for documents. We are now taking the important first step to boldly change the outdated practice of prolonged on-site audits."

According to the National Tax Service, business representatives attending the meeting commented, "When audit teams are stationed for several months during periods when important work such as shareholders' meetings, tax filing, or closing of accounts is concentrated, employees experience significant psychological pressure as they have to juggle both their regular work and responding to tax audits. While tax audits are sometimes necessary, we hope the National Tax Service will work together to find ways to reduce the burden on companies."

In response, Commissioner Lim said, "We are fully aware of the difficulties companies face during extended on-site audits. As the first step in tax audit reform, the National Tax Service will establish 'minimizing on-site audits' as the new standard, thereby alleviating the tax audit burden on taxpayers."

Going forward, the National Tax Service plans to conduct regular tax audits primarily at tax offices rather than at the taxpayer's workplace, keeping on-site audits as brief as possible and only when absolutely necessary. Audits will be conducted via documentation, phone, or taxpayer visits at the tax office. However, in cases where on-site audits are more convenient for taxpayers due to concerns about business confidentiality or the burden of visiting the tax office, or when the audit cannot proceed smoothly due to non-submission or delayed submission of documents, on-site audits will be conducted in a limited manner.

In addition, the National Tax Service will actively operate the pre-review system for research and development (R&D) to resolve tax uncertainties for companies and support the innovation and growth of small and medium-sized enterprises.

Commissioner Lim stated, "The National Tax Service will continue to hold communication sessions like today and visit the field directly to listen to the opinions of the public in order to address the difficulties and challenges faced by small and medium-sized businesses. The valuable feedback you provide will be actively reflected in tax administration, so that companies can focus solely on their business activities without worrying about tax issues."

This content was produced with the assistance of AI translation services.